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Government Rejects Oil Drilling Deal in Alaska Refuge

Date:19-Jul-09Country: USAuthor: Yereth Rosen

ANCHORAGE, Alaska - The U.S. Fish and Wildlife Service has rejected a controversial land trade that would have allowed oil and gas drilling in part of a national wildlife refuge in Alaska.

The service said it had made a preliminary decision to reject a Bush administration proposal in the works since 2004 to trade out land in the Yukon Flats National Wildlife Refuge so that it could be explored for oil.

Opposition from residents of Native American villages near the proposed drill sites, new information on geologic resources and a closer look at climate-change impacts led to the unexpected shift against going through with the land trade, officials said.

"The (environmental review) process worked, though it may have led us in a different direction than we had originally anticipated. Going into this effort, we did not anticipate the level of opposition we heard from some of the most affected communities within the Yukon Flats," Refuge Manager Rob Jess said in a statement.

The final decision from the service is due in early 2010.

The trade would have given 110,000 acres of hydrocarbon-prone refuge uplands, plus mineral rights to another 97,000 acres, to Fairbanks-based Doyon Ltd, a corporation owned by Athabascan Indians of interior Alaska.

In exchange, Doyon would have given 150,000 acres of bird-rich wetlands to the refuge, plus future rights to 56,500 more acres.

Gov. Sarah Palin and Alaska's sole U.S. House member, Republican Don Young, were strong supporters of the swap.

Environmentalists opposed it, saying it would set a precedent for drilling in other protected sites, particularly the Arctic National Wildlife Refuge just north of Yukon Flats.

The most critical opposition came from Native villagers near the area that would have been opened to drilling, Fish and Wildlife officials said.

Though many are Doyon shareholders themselves, villagers argued that environmental and social disruptions would outweigh any economic gains.

Noise, roads and an "industrial complex right near where the Yukon River is" would have put traditional fishing and hunting grounds at risk, said Faith Gemmill, a Gwich'in Athabascan from Arctic Village, a small community in the region.

"The impacts to the Gwich'in people's way of life and the communities closest to the proposed drilling would be long-term," said Gemmill, who heads the Native environmental group REDOIL.

The Yukon Flats basin is believed to hold 175 million barrels of oil and 5.5 trillion cubic feet of natural gas, according to Interior Department estimates.

For Doyon, the land-trade reversal is not much of a setback because the corporation has alterative development options, said Jim Mery, vice president for lands and natural resources.

"We've been having growing doubts in the last year or two over at Doyon about whether this makes any sense for us at all," Mery said of the trade.

The corporation, along with three partners, is drilling an exploration well on state land in the Nenana Basin 40 miles southwest of Fairbanks. The project could eventually provide an energy source to Alaska's second-largest city, or if extraordinarily successful, could send natural gas to Anchorage, Mery said.